Reward System at IBM

                  

Introduction:

In this blog I am briefly focusing on what is Reward management and its principles then I will focus on IBM’s Rewarding policies, practices and strategies. Each of the reward management themes need to be studied broadly but my aim of this blog is to study IBM’s rewarding system as it is one of the oldest and successful firms in the world and this is why I would like to learn what IBM is focusing on and taking into account regarding rewarding people. And at the end I have concluded my point of view.

What is Reward Management:

It is very interesting to realize that Rewarding people has different types of principles and if there is not a Rewarding system or a correct Rewarding system organization can end up being less successful. People usually contribute and corporate more if they feel that they are valued and this happens when you recognise and reward them accordingly to what they achieved, Armstrong (2008). As we know Rewarding Management deals with strategies, policies and practices and usually managed by the HR function and it is the front-line managers who apply and influence on how people are valued but also how line managers use the reward system depends on the organization’s reward system. Having said all above, Reward Management has two vital questions: 1) How do we value people? 2) How are we going to reward them according to that value? Also, we need to consider the aims of Reward Management “but, Ghoshal and Bartlett (1995) emphasized on that reward management is essentially about adding value to people and it is not about attaching value to them” and Reward Drivers. which is argued that it has three important determinants: 1) Internal relativities 2) External relativities and 3) Performance.

Furthermore, taking in account the level of rewards and reward strategies is very important, Kogan Page (2009). There are three types of rewarding: 1) Financial reward 2) non-financial reward 3) total reward, but total reward is not an easy option and it is outdated according to Warldat (2000) and Brown (2014).

IBM Types of Reward

Total reward is a promising approach to rewards management that has been adopted by such technology-intensive firms like IBM, Microsoft, AstraZeneca, and Johnson & Johnson. Total reward takes a holistic approach to rewards, going beyond the strong focus on pay and benefits which has been the hallmark of traditional compensation practice. Total reward considers all the rewards available in the workplace, including opportunities for learning and development, and quality work environment. Because these rewards are a high priority for technical workers, total reward offers an opportunity to tap the unrealized potential of the organization. Effectively managed rewards will ease the critical attraction, retention and 

motivation challenges faced by high-technology firms. IBM reaps rewards of employees who think on the job. Rewarding staff for bright ideas is a way to boost the company’s profitability and motivate the employees at the same time, IBM (2006).

 IBM Strategy; Reward System Design

IBM before taking any step first is questioning itself:

Ready or not? Ask yourself these questions 

• How does your current employee experience affect the attraction and retention of critical job roles within your organization? 
• How could improving your employee experience increase productivity within your organization? 
• To what extent does your employee experience influence your customer experience? 
• Who has primary responsibility for designing employee experience within your organization? How does a person or team bring others together to address employee experience issues? 
• What types of analytics are you using to evaluate the effectiveness of your employee experience? 

IBM Benefits Summary                       
IBM offers a competitive benefits program, designed to support you and your family across all dimensions of health: physical, mental, social, financial, and purpose. 

Key features: 

• Health Benefits Portfolio that provides strong support for your well-being and preventive care, comprehensive coverage to meet a range of medical situations, and solid protection against the cost of serious injury or illness. 

• Retirement Program that helps build future financial security through a leading-edge 401(k) plan and other capital accumulation programs. 

• Income Protection in case of serious illness, injury or death, including life insurance and disability benefits. 

• Opportunity to follow leisure pursuits through vacation, personal leave and holiday plans. 
• Eligibility: You are eligible for all applicable benefit programs, except the IBM Employees Stock Purchase Plan, beginning with your first day of employment. Health care coverage (medical, dental and vision) is available for you, your spouse or eligible domestic partner, eligible children and other eligible dependents. 

About Employees Health, Life and Disability Benefits

IBM provides a range of options to allow you to design a program that meets your personal or family circumstances. You can enrol in benefits when you first join IBM, and you’ll have the opportunity to review and change your benefits each year during the enrolment period, usually held in the fall. You pay for your share of benefit coverage through payroll deductions. 

On the next page you can see the table of IBM Rewards: Financial, Non-financial rewards, Contingent pay, employee benefits.

IBM pay bonuses

IBM Global Services pays an average of $4,274 in annual employee bonuses. Bonus pay at IBM Global Services ranges from $1,500 to $9,759 annually among employees who report receiving a bonus. Employees with the title Associate Partner, Consulting Services earn the highest bonuses with an average annual bonus of $9,759.

 IBM’s Employees reviews 

Here are the reviews regarding IBM Rewards also you could click on Glassdoor to read more. 

Pros

• “Great work space, free food, flexible working hours” (2298 reviews)
• “Great work environment” (2246 reviews)
• “Good work culture and equal opportunity for women” (1394 reviews)
• “very flexible in terms of working hours” (1054 reviews)
• “many opportunities to learn, stimulating environment” (945 reviews)

Cons

• “No cons at the workplace at all” (708 reviews)
• “Low Salary increase is very good” (653 reviews)
• “Salary hike is not that attractive” (574 reviews)
• “Nothing but career growth will be minimal” (555 reviews)
• “long hours, hard work all the time” (548 reviews)

Conclusion:

According to IBM’s reward system and the reviews, I have understood that financial reward is not the main key of rewarding people to increase engagement and productivity and employee satisfaction. The other key rewards such as non-financial reward and benefits encourage people to contribute more to improving the business performance. Also, it is said that the total management is easy in concept but not in action and there is a critical evaluation of the total reward for example by: Giancola (2009), Worldat (2000), and Brown (20019) however according to the reviews IBM is doing good and can improve much better by being critical on total reward via implementing and focusing more on employees voice.

References:

IBM (2019) Benefits and HR Programs: Employee Benefit Summary. Available at: https://www.ibm.com/usen/employment/benefits/assets/2019_Benefits_and_HR_Programs.pdf (Accessed at: 27. April. 2020).

Glassdoor (2020) IBM reviews. Available at: https://www.glassdoor.co.uk/Reviews/IBM-Reviews-E354.htm(Accessed: 27. April . 2020).

Michael Armstrong and Stephen Taylor (1977) Armstrong’s Handbook of Human Resource Management Practice. 15^thedn. London: Kogan Page.